The Oil Price Opportunity

Though lower oil prices may boost overall global growth, with the oil-importing advanced economies gaining the most, the impact on efforts to combat climate change could be devastating. But this decline in oil prices could also provide a rare political opportunity to introduce an explicit carbon price.

WASHINGTON, DC – The sharp drop in the price of crude oil since late June has been grabbing headlines worldwide – and producing a lot of contradictory explanations. Some attribute the fall largely to declining global growth expectations. Others focus on the expansion of America’s oil and gas production. Still others suspect a tacit agreement between Saudi Arabia and the United States aimed at, among other things, weakening political rivals like Russia and Iran.

Regardless of the reason for the price drop – probably to be found in some combination of these factors – the consequences are the same. Though, as International Monetary Fund Managing Director Christine Lagarde has noted, lower oil prices may boost overall global growth, with the oil-importing advanced economies gaining the most, the impact on efforts to combat climate change could be devastating.

Indeed, a sustained decline in oil prices would not only make renewable energy sources less competitive now; it would impede their future competitiveness by discouraging research and investment. More generally, it would reduce the incentive for consumers, companies, and governments to pursue more energy-efficient practices.

A carbon tax to limit greenhous gas emissions is nonsense without a population 'tax' in order to limit population growth. With 3 billion on this planet in 1960 we are now at 7.2 billion heading for 10 - 11 billion in 2100. The low prices now are a blessing for poorer oil importing countries allowing them to double their population in the coming 30 years. Lima? In the past 12 year Peruvians destroyed 1.5 millio hectares of pristine forrest ....

"..The impact on inflation due to lower fuel prices in not entirely restricted to the core inflation numbers. Various wage, pension and similar payments are based on the headline consumer price index. To the extent that lower fuel prices reduces the consumer price index, that would lower those payments. Likewise, even wages that are not explicitly indexed to the consumer price index may be effected by lower fuel prices as wage demands could be lessened by lower costs of living.
Lower fuel costs can also be passed through to prices that are inside the core ex-food and ex-energy area. Transportation cost are a prime example. Airfares and other transportation costs such a bus, train and water travel have fuel as a large component of their costs. Lower transportation costs can indirectly lower other prices. For example if a good now costs $100 in one city and $95 in another city a certain distance away and it now costs $5 to transport the good from one city to the other, those prices can prevail. However, if the cost of shipping the good from one city to the other falls to $4, the price in the high cost city should fall to $99..."
http://seekingalpha.com/article/2770845

Green energy=Interesting profit making capability for the same people who for decades pollute and destroy the planret.
and by doing it they willof course destroy some more ,since all these Green lies are based on making things out of carbon burning.....to make a solar panel you need how much carbon dears?...or to make a wind gen????environment wants one thing.to be left alone by these vultures...yes you!.

I will put it lightly.Leave us alone with your new ideas for taxes and income for the parasites of IMF and banks.
No more of this tricks.Capitalism is duing ,and you will with it iyt seems,by your reactions
We dont care to pay anything for climate change because its not our fault.,
the big IMF friends are the polluters,go and tax them.
Enough with all the servants of the rich...leave our plaet alone
It is your ideas and policies that destroyed it in the first place
frack off

Imagine children growing uo without parental supervision. Imagine yourself growing up in the streets, literally! Will you be what you are today?
Now imagine telling a great nation like ours to "finish the vegetables because it is good for you!" Decision makers have their own job in mind and not the "environment".
But do not worry, if our species turns out to be unfit, there will be other species that will advance.
In fact, ruining our environment is not a big deal. I have proof! Look at Chernobyl today - all species are thriving - sans human!
Let's don't be too proud of ourselves! - the cannabis is smarter than us!

Oil price is not the culprit. It's the "next quarterly report"mentality that's ruining our environment. To protect the environment we are asking our decision makers to care about the livelihoods of unborn generations while their job security depends on the immediate quarter result! How well is it working? Not complicated!

It certainly is the best time in recent history to institute a carbon tax - one, due to the urgency of our looming climate problem - and two, it could be done quite painlessly due to the large drop in oil prices (a fall of some $80./bbl from its peak price of $145./bbl in July 2008) falling $40//bbl just in 2014 alone.

I respectfully disagree that the carbon price should be fixed on some sort of sliding scale. That complicates matters.

It's a hard enough sell as it is, without adding complicated formulas to the equation.

The UN really needs to grab the bull by the horns here and make this happen. It will be such a lost opportunity, inexcusable even, if a carbon tax regime is not agreed by July when oil prices are forecast to rise. At that point, we can kiss any chance of a carbon tax on fossil fuels, goodbye. No one will agree to a carbon tax as oil prices are rising.

Rather than spend a year or two wrangling over a formula, when we only have a 7-month window is folly. We should resolve to employ the 'quick and dirty approach' and agree to a reasonable $20./tonne of CO2 emitted carbon tax -- while we still have the opportunity to make it fly.

Any delay on this, works to the oil company's benefit as trying to sell a carbon tax once the oil price begins to rise anew, will be virtually impossible. Oil company execs are likely rubbing their hands together with glee, waiting for us to get bogged down in arcane debates about carbon tax pricing structures. They've only got to obstruct the whole debate until July 2015 in order to win.

The generic argument behind this article is almost impossible to refute. Economically, introducing a Carbon Tax now makes very good sense, especially given the current low energy prices. Unfortunately, it ignores the political reality. A carbon tax must increase the price relative to competing economies unless those competing economies do likewise. This unfortunately is not going to happen. With so many economies searching for a cost advantage those implementing a carbon tax will be at a disadvantage, and those not implementing it, at an advantage. Carbon Pricing makes perfect sense at a global level. Unfortunately, most sovereign economies do not think globally. But then that should not be surprising. Human beings generally do not think and act for anything outside their immediate community and many can't even see beyond their own short term needs and wants. In this context, what hope does a global solution have that requires collective thought and action?

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PS OnPoint

The Mueller report in America, along with reports of interference in this week’s European Parliament election, has laid bare the lengths to which Russia will go to undermine Western democracies. But whether Westerners have fully awoken to the threat is an open question.

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